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Harper Plastics Inc. v. AMOCO Chemicals Corp.


decided: March 17, 1980.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 76-C-2350 -- John Powers Crowley, Judge .

Before Swygert, Circuit Judge, Wisdom, Senior Circuit Judge,*fn* and Tone, Circuit Judge.

Author: Tone

The sole question we address in this opinion*fn1 is whether the district court properly granted summary judgment on plaintiff's claim that defendants had violated § 2(e) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(e), by refusing an unconditional delivery of goods to plaintiff despite an alleged contract between the parties.*fn2 The district court granted judgment for defendants on the ground that no "consummated transaction" had taken place and that plaintiff was thus not a "purchaser" within the meaning of § 2(e). We affirm on the ground that the conduct complained of did not constitute the denial of a "service or facility" within the meaning of that subsection.


Plaintiff Harper Plastics purchases and resells raw thermoplastic materials and other plastic goods. Defendant Amoco Fabrics manufactures and sells, among other things, a woven carpet backing made of polypropylene plastic. The transaction at issue involved an alleged sale by Amoco Fabrics to Harper of a quantity of polypropylene carpet backing. Harper asserts its claim against both Amoco Fabrics and Fabrics' parent and primary supplier, Amoco Chemicals.*fn3 Both defendants can be treated as one for our purposes and will be referred to jointly as Amoco.

In November of 1974 Amoco and Harper negotiated for the purchase by Harper of a large quantity of polypropylene carpet backing. The parties dispute whether a contract for sale was made. It is undisputed that Harper received a small sample of the material,*fn4 and that at some point Amoco informed Harper that it was selling the goods on the condition that Harper resell them abroad and not to customers within the United States. After the sample had been delivered, and apparently while the remainder of the goods were in transit, Amoco sought assurance that Harper planned to resell the goods overseas by demanding that Harper disclose the names of its customers. Harper refused to comply with this demand. Amoco then halted the sale, and Harper returned the goods already delivered and received a refund. The instant action followed.

I. Consummated Transaction Issue

On the above facts, Harper contends that, because Amoco required no other purchaser of its carpet backing to disclose a customer list to secure delivery, Amoco discriminatorily denied Harper the "service or facility" of an unconditional delivery in violation of § 2(e).*fn5 The district court found, however, that Harper was not a "purchaser" within the meaning of § 2(e) and that no "consummated transaction" had taken place; on these grounds it entered judgment for Amoco.

In reaching its conclusion, the court first noted that § 2(e) does not prohibit a seller from choosing its customers and from refusing to deal with prospective purchasers to whom, for whatever reason, it does not wish to sell. We agree with this*fn6 and with the corollary noted by the court that one must be a "purchaser" to claim the protection of § 2(e).*fn7 The district court found, however, that Harper was not a purchaser within the meaning of the Act, apparently because, in its view, no consummated transaction had taken place.*fn8

We believe a consummated transaction in the sense of a fully executed contract is not required by § 2(e). A complaining party may become a "purchaser" within the meaning of § 2(e) solely by entering into a contract for the purchase of goods for resale.*fn9 Execution of the contract is unnecessary.

Factual disputes as to the existence and terms of an executory contract appear from the record.*fn10 Accordingly, the summary judgment cannot be sustained on the ground that no contract for the purchase of the carpet backing had been made.

II. Services or Facilities Issue

Amoco urges, as an alternative ground for affirmance of the judgment, that the failure to deliver the carpet backing was not, as a matter of law, a denial of a "service or facility" within the meaning of § 2(e).*fn11 Amoco maintains that § 2(e)"s use of the words "services or facilities" encompasses only "merchandising services or facilities," and cites language to that effect from one case, Skinner v. United States Steel Corp., 233 F.2d 762, 765-66 (5th Cir. 1956).*fn12 Amoco also points to the Federal Trade Commission Guides for Advertising Allowances and Other Merchandising Payments and Services, 16 C.F.R. § 240.5 (1979), which contains a list of services or facilities that the Commission deems covered by the Act.*fn13 This list, says Amoco, is composed of merchandising services and does not contemplate § 2(e) coverage of a non-merchandising service such as "unconditional delivery." In response, Harper merely asserts, without citation of authority, that the conduct of which it complains is within the scope of § 2(e).

In a case neither party mentions, this court determined that, under some circumstances, delivery is a service within the meaning of § 2(e). Centex-Winston Corp. v. Edward Hines Lumber Co., 447 F.2d 585 (7th Cir. 1971), cert. denied, 405 U.S. 921, 92 S. Ct. 956, 30 L. Ed. 2d 791 (1972), held that furnishing consistently timely delivery services to favored purchasers and consistently late delivery services to a disfavored purchaser constitutes discrimination in the furnishing of a "service" under § 2(e). The court's broadly worded statement of its holding was that § 2(e) "covers discriminatory differences in deliveries." 447 F.2d at 588. Centex-Winston also noted that the FTC Guides to the interpretation of § 2(e) do not purport to be all-inclusive*fn14 and "are not confined solely to promotional matters."*fn15 Id. Thus, the court concluded that § 2(e) should not be "confined to the conventional type of promotional services." Id. at 587.

Centex-Winston is apparently the only case to have squarely held delivery to be a "service" under § 2(e). It has met with some criticism,*fn16 the merit of which we need not examine to decide the case at bar.*fn17 Given the holding of Centex-Winston, the facts before us still fail to support Harper's § 2(e) claim.

The conduct of which Harper complains, imposing a condition that resale be overseas and demanding assurances in the form of a customer list, was not discrimination with respect to delivery services; rather, it was a refusal to go forward unconditionally with a sale. It was a breach of the contract of sale, if anything. Section 2(e) requires that the service of delivery itself be made available to purchasers on proportionally equal terms. It does not require that all conditions precedent to a delivery be identical in every transaction in like goods sold for resale. As the gravamen of Harper's complaint is discrimination with respect to a term of sale not itself a "service" within the meaning of § 2(e), Harper may not bring its case within the subsection by employing the label "delivery."

Section 2(e) does not federalize the law of sales contracts or enforce equality in terms of sale other than those concerning services or facilities. That a delivery is contemplated in connection with a sale does not bring the conditions of the sale within § 2(e). Section 2(e) requires that the terms of the delivery service itself, and not the conditions of the sale, be made equally available.

Because the facts do not show a discrimination in services or facilities, the judgment of the district court on Harper's § 2(e) claim is affirmed.


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